Friday, October 07, 2011
Thirteen banks and mortgage companies are being sued for allegedly perpetrating a “massive fraud” on veterans by charging them hidden fees forbidden under federal law.
Two mortgage brokers brought the lawsuit after they were told by banks not to show attorney’s fees on their estimates—but instead add them to other fees. Under rules from the Department of Veterans Affairs, lenders are forbidden from charging attorney’s fees or settlement closing fees, so some institutions merely hid the expenses while refinancing home loans held by veterans.
“It was gut-wrenching to us, seeing the brazenness” of the lenders, broker Victor Bibby told The Washington Post.
The defendants include Wells Fargo, Bank of America, JPMorgan Chase and GMAC Mortgage. They are accused of bilking individual veterans anywhere from $300 to $1,000 by hiding the fees that never should have been levied in the first place, according to the suit.
Attorneys representing the plaintiffs assert that up to 90% of the 1.2 million veterans and their families who received refinanced loans in the past decade may be affected.
-Noel Brinkerhoff
Suit Alleges Banks and Mortgage Companies Cheated Veterans and U.S. Taxpayers (by Steve Vogel, Washington Post)
JPMorgan, Bank of America, Wells Fargo Accused Of Overcharging Military Veterans (by Alexander Eichler, Huffington Post)
United States v. Wells Fargo et al. (U.S. District Court, Northern Georgia, Atlanta) (pdf)
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